Amazon 1p price glitch: When automated systems go ‘wrong’

By Anh Nguyen

Computerworld|

Online retailer Amazon is often cited as an inspiration to others, at least from a technology point of view. For example, in interviews with ComputerworldUK, Ocado’s CTO Paul Clarke said that the online food retailer was ‘on an Amazon-like journey’, while online luxury fashion retailer Net-a-Porter’s CIO Hugh Fahy said that it’s hard to beat Amazon’s fulfillment processes. However, Amazon is now witnessing the downsides of having such highly automated and efficient processes, after an hour-long pricing glitch on Friday evening turned into losses of thousands of pounds for a number of its third-party sellers.

In this case, the software pricing error lies not with Amazon, but with a third-party application from Derry-based firm RepricerExpress that promises to help retailers increase their sales on Amazon by automatically repricing listings “faster than your competitors”. But rather than earning RepricerExpress subscribers a profit, the software glitch priced a wide range of unlikely items - from mattresses to Playstation4 (PS4) computer games - at just 1p.

The retailers who were affected were those who have signed up (and paid for) the ‘Fulfilment by Amazon’ (FBA) service, which allows them to store their goods in an Amazon warehouse and lets Amazon take care of picking, packing and shipping orders. Normally, this would allow smaller retailers to benefit from Amazon’s large and highly efficient logistics network, but last week they experienced first-hand the disadvantages of being part of such a well-run and automated supply chain system.

RepricerExpress apology

RepricerExpress’s CEO has acknowledged the fault - without giving any details of why the error occurred - and apologised to the affected retailers, many of whom are small, independent retailers.

“We experienced a problem with RepricerExpress on Friday evening which caused incorrect pricing to be sent to Amazon. We managed to get the problem resolved so that any new prices going to Amazon were correct within about an hour of the problem reported. It took a further few hours to get incorrect prices reverted to their original prices where possible,” said CEO Brendan Doherty.

“I would like to take this opportunity to apologise to our customers for this issue. We will continue to investigate the cause and to put measures in place to prevent it from happening again. One of the things all sellers can do to prevent this issue from happening again is to ensure that they do not de-activate the pricing alerts facility provided by Amazon, which caters for potential repricing errors.”

Doherty also said that Amazon has assured RepricerExpress that seller accounts will not be penalised for the issue, but notably does not say what redress RepricerExpress will provide for its customers.

In a statement to ComputerworldUK, Amazon said: “We responded quickly and were able to cancel the vast majority of orders placed on these affected items immediately and no costs or fees will be incurred by sellers for these cancelled orders.

“We are now reviewing the small number of orders that were processed and will be reaching out to any affected sellers directly.”

However, it is not known how many orders were sent out under the inaccurate pricing, and the retailer has declined to specify what compensation, if any, it plans to provide to sellers hit by the glitch.